Equitable Life
Karen Lee Excerpts(5 years, 2 months ago)
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Karen Lee (Lincoln) (Lab)
It is estimated that there are around 1,500 victims of the Equitable Life scandal in Lincoln, and I have been working closely with some of them. After years of campaigning, nearly 1 million people are still being told that their compensation is limited to less than a quarter of the loss that they have suffered, and many of those savers are nurses, teachers, civil servants and shop workers. They are not people with stocks of wealth to keep them in their old age. They have worked hard all their life and put money aside for a secure and peaceful retirement, just as the Government advised them to do. It is therefore completely unjust to expect them to accept only a fraction of the losses caused by administrative errors that were out of their control.
In 2010, the Government accepted in full the parliamentary ombudsman’s findings that the victims of the scandal should be promptly compensated for their losses, and that those losses were directly attributable to chronic failures by the Treasury and regulators. The former Chancellor, the previous Member for Tatton, stood up in this House in October 2010 and implied that, despite accepting the ombudsman’s findings in full, the Government could not afford to allocate more than £1.5 billion for victims due to his choice of embarking on a damaging and counterproductive austerity project. It is worth remembering that, although there is cross-party support for this cause, every Member here knows that it was ordinary people who suffered under austerity, at the same time as very wealthy people got tax cuts, and those tax cuts were clearly the Government’s priority at that point.
Karen Lee
No, I will not. I want to make some progress.
The victims appear to have fallen between the cracks of the financial crisis, which saw our banking corporations bailed out while hard-working and responsible pensioners were left to suffer. This is not charity. This is repaying hard-earned and prudently saved money to its rightful owners, and that is surely something that we should be supporting. The Government’s refusal to repay in full has real-life consequences. Hundreds of thousands of people across the UK have been denied the secure retirement that they made sacrifices for throughout their career.
In Lincoln, one of my constituents, Jill, has been fighting on behalf of local victims of this scandal. She said:
“My husband and I worked hard throughout our careers. We were devastated to find that all but a small proportion of our pension pot, for which we had saved so hard, has been lost to us. All we ask is that we are paid the money that is owed to us, and that we saved so hard for. I really hope that the Government will do the right thing and ensure that the thousands of claimants in Lincoln and across the UK finally get the pension they are entitled to.”
If austerity really is over—I am holding my breath on that one—I sincerely hope that the Government will finally listen to Jill and the hundreds of thousands of others who have, through no fault of their own, been stripped of their hard-earned savings. It is time for the victims of this scandal to receive the justice that they deserve and the full pension repayment that they have been fighting for.
European Union (Withdrawal) Act
Karen Lee Excerpts(5 years, 4 months ago)
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John McDonnell
We believe that a permanent customs union is an essential part of the architecture for the future relationship that will secure our prosperity, and it would benefit the overall economy.
Far from influencing Members to back the Prime Minister’s deal, I believe that the threat of no deal, used in this way, is actually strengthening the momentum to secure an alternative approach.
I move on to the Prime Minister’s deal. It is clear that it is bad for Britain. It does not protect jobs or living standards and would leave this country worse off; it does not even respect the Prime Minister’s own red lines. It risks indefinitely tying the UK to agreements over which we will have no say whatever. It does not include a permanent customs union; it does not protect employment or environmental rights; and it does not deliver a strong relationship with the single market to protect businesses or, crucially, to allow them to plan with any certainty.
Karen Lee (Lincoln) (Lab)
I voted remain but my constituency voted leave. This deal is not bringing the House together. It is not bringing Government Members or the country together. Does my right hon. Friend agree that there has to be a better way?
John McDonnell
My hon. Friend’s position is the same as mine: I campaigned for remain, but my constituency voted leave. People are looking for a compromise that will work; the problem with the Government’s proposal is that it will not work—and they know that.
I want to get something absolutely clear with the Chancellor. For the millions who work in the financial services, the deal and framework give no clarity on what any equivalence regime might look like. It damages the country politically and, most importantly, economically. We were initially told, and the Chancellor has repeated this today, that we would secure enhanced equivalence. Paragraph 38 of the framework starts:
“Noting that both Parties will have equivalence frameworks”.
Will the Chancellor confirm that an enhanced equivalence deal has been signed already? Enhanced agreement is what we were offered and promised by the Chancellor. There is no reference to enhanced equivalence, only to equivalence. That means greater insecurity for the finance sector, one of the key sectors of our economy.
Karen Lee (Lincoln) (Lab)
My constituency of Lincoln voted to leave the EU, while I voted to remain, but we are united in fighting for a better future for Lincoln outside the EU. I sincerely believe that there is a Brexit deal that will benefit my constituents and Lincoln’s business and tourist communities—a deal that protects jobs, the economy and our rights. We need a transitional period based on the same basic rights that we have now —a single market and a customs union with the EU—but to ensure that we have a sustainable, prosperous economic future, we must negotiate a new comprehensive UK-EU customs union to ensure that we have no tariffs with Europe and that we have control of any new trade deals.
That will benefit the manufacturing industry, which is central to Lincolnshire’s economy. Local companies need a frictionless trade deal to maintain supply chains and have access to the European markets. However, the Prime Minister’s proposed agreement attempts to ensure that trade is “as frictionless as possible” and the Government’s own forecasts suggest that the value added to the economy by the manufacturing industry will be reduced by as much as 2% under the current deal, and a no-deal scenario may decimate the sector by 12%.
For those working in Lincoln’s manufacturing industry, we must guarantee that our country does not fall behind the EU in workers’ rights, or in protections for consumers and the environment—we do not hear a lot on that from Government Members. This deal will not protect jobs, workplace rights or environmental standards, and it will inhibit businesses by failing to ensure frictionless trade or any certainty about our future relationship with the EU. The political declaration does nothing to ensure market stability or to encourage increased investment in the UK. The longer that this instability continues, the more likely businesses are to leave the UK. We have the Bank of England telling us that the Prime Minister’s plan will see the economy shrink by 3.75%, compared with the pre-referendum trend, and the National Institute of Economic and Social Research telling us that the deal could lead to our GDP losing 3.9% of growth, which equates to around £100 billion in 2016 prices—money that could be much better spent on our devastated public services.
I am very proud to represent Lincoln today, a place that was close-fought in the referendum but chose to leave. Prior to deciding how to vote, I surveyed my casework to assess what Lincoln thinks about the PM’s deal. A very large majority—both remain and leave voters—have asked me to vote down the deal, acknowledging that there are alternatives before we meet the no-deal cliff edge. We can renegotiate with the EU, or better still, hold a general election. Many of my constituents acknowledge that a successful Brexit is contingent on replacing this shambolic Government.
The Prime Minister has spent the last two and a half years trying to solve the squabbles within her party, instead of focusing on trying to get a good deal for this country. That is why, at such a late stage in negotiations, we have such a poor deal in front of us. It simply is not good enough and this country deserves better. If the Prime Minister simply cannot deliver better, she should stand aside and make way for a party that will.
Finance (No. 3) Bill
Karen Lee ExcerptsMonday 12th November 2018
(5 years, 5 months ago)
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Karen Lee (Lincoln) (Lab)
Will the Minister confirm the total cost to the Exchequer of corporate tax reliefs in the last financial year?
Mel Stride
What I can confirm to the House is that in reducing corporation tax from 28% to 19% since 2010, we have increased the yield from corporations, not just by a few per cent. but by 50% over that period. We are now talking about taxation, so let us ask: what is Labour’s plan? It is to put taxes up to 26% for large companies and to 21% for small businesses, which would be a full 50% increase in tax bills for large companies and a 25% increase in tax bills for smaller companies.
John Redwood
I agree. I do not think we will reach the happy position that my hon. Friend and I would like to see, with no stamp duty at all, but I think we could make a great deal of progress by introducing a more realistic stamp duty rate so that people could fulfil their dream of moving up in the world on the housing ladder, or go the other way and buy a smaller home or one in a cheaper location. At present, those penal stamp duties are getting in the way of all kinds of mobility and the fulfilment of aspiration. Surely we should be helping people to fulfil their aspirations, and the wish to live in the right home in the right place is an important part of that.
I strongly welcome the relaxation of austerity in the public sector. We did need more money for health services—I certainly needed it for the hospitals and surgeries in my part of the world—and for social care. More needs to be done, but there has been a bit of progress. I also strongly welcome the extra money for road improvement and maintenance, although, again, more needs to be done.
John Redwood
We want more housing for more people. There are people who need homes, and I am very much in favour of helping to provide them. The Government have many programmes relating to house building and more affordable housing, and that is all very welcome.
However, we need to continue the progress. We need to look at the defence budget, the social care budget, and the schools budget. Certainly, in both the West Berkshire Council and the Wokingham Borough Council areas—parts of which are in my constituency—we need more for our local schools. They are at the back of the queue for funds nationally, and the amounts that we are receiving are simply not enough to sustain the quality of service that we need to supply.
There is one big issue overhanging this debate that few people ever seem to mention. I would like us to have access to the £39 billion that some people want to spend on the European Union withdrawal agreement. We do not owe that money, and I do not think we will get anything out of a 21-month additional period for an argument with the EU about the future relationship. If we cannot secure a good future relationship by March, I do not think it will be easier to do so once we have given all the money away, and signed and sealed a deal on it.
I urge the Government to regard the £39 billion as something that we Leave voters voted to take back control over, and to spend on our priorities. What a transformation we would see both in our public services and our economy if, instead of signing that money away in a withdrawal agreement in the naive hope that it will produce something better—which it will not—we spent it on our priorities. We could have tax cuts with a tax cost, not just tax cuts to raise more revenue in the instances that I have described; and we could have quite a lot of extra money for our schools, hospitals and defence, and our other priorities, much more quickly. We know we have access to that £39 billion over a two to three-year period, because we know the Chancellor has costed it all and made provision for it. Most of it would be spent during the period, which, over that time, would provide a 2% boost for our GDP. That would be an extremely welcome addition, and it would be rather like what the United States of America is trying to do through easier monetary and fiscal policies than those that we are following.
I want a true end to austerity. I am with the Prime Minister in saying that we must end austerity, because ending it means more money for our schools, hospitals and other priorities. As I have explained, we can afford that, if only we do not keep on giving all this money to rich countries that do not want a free trade agreement with us. However, I also want to end austerity for all the people who work in the private sector, and that is about more tax cuts.
So, Government, well done so far; but be bolder, show more courage, and then you will create a much more prosperous country.
Kirsty Blackman (Aberdeen North) (SNP)
It is great to be back here, speaking in another Finance Bill debate—especially when we know that yet another is likely to be just around the corner, in March, if there is a no-deal Brexit and there then has to be what the Chancellor euphemistically calls “a fiscal event”.
As we heard from the hon. Member for Bootle (Peter Dowd), this Budget was a continuation of austerity. We continue to have the benefits freeze, we continue to have the rape clause, and we continue to have cuts in Government Departments. The Scottish Government fiscal resource block grant allocation will have been cut by 6.9% in real terms between 2010-11 and next year, and the Barnett allocation for health has not been passed on in full, despite repeated assurances from the Government that it would be.
Next week we will get into the nitty-gritty of the Finance Bill. Breaking with the tradition so far in the debate, I am going to talk a lot about the measures that are in the Bill, and about some of the aspects that concern me. I shall talk a fair bit about process as well. As the hon. Member for Bootle said, there have been real issues in relation to process, in this Bill more than in previous Finance Bills.
Paper copies of the Bill were not made available until Wednesday, when the House was in recess and those of us who do not live in London were mostly not in London. I had to go to the people in the Vote Office and ask them to post a copy to me. They did post it to me, which was terribly kind of them. However, I had already had to ensure that the Scottish National party’s reasoned amendment was tabled before I had seen any copy of the Bill, let alone a paper copy. The process was not fit for purpose. It is not right that we should have to table amendments before seeing a Bill, and I implore the Minister to ensure that it does not happen again. If it does, we will protest even more vociferously.
There are other issues relating to process. The Chartered Institute of Taxation has said:
“Just 37 of the 90 substantive clauses in the Bill, and 12 of the 19 lengthy schedules, were included in the draft bill published for consultation over the summer.”
It is unusual for so few measures to be consulted on, but what is even more unusual is the timescale. The Government are expecting external organisations to digest clauses that they have never seen before and then to comment on them, in advance of the Committee of the whole House, which we expect to be on Monday and Tuesday next week. Having had the Bill in their hands for less than a week and a half, they will be expected to make serious suggestions for improving it. Let us not forget that the purpose of the scrutiny is to try to make the legislation better. In fact, the Government have pointed out that two measures in the Finance Bill exist to correct errors made in previous years. The Government made errors in previous years when there was a more lengthy consultation process for most of the measures, so I contend that there are likely to be even more errors in this Finance Bill, given that it has not had external scrutiny due to tight timescales.
On that point—the Minister probably knows what I am going to say now—we need to have evidence sessions in the Public Bill Committee. If we are not going to have enough time for appropriate scrutiny in writing that is provided to MPs in advance, it is even more important, especially this year, that external organisations give evidence in the Public Bill Committee. I will move an amendment to that effect when we come to the programme motion. Members across the House have voiced support for the Committee taking public evidence. The problems raised by the Government regarding the fact that we will already have had Committee of the whole House by that point are realistic ones when it comes to the measures going before a Committee of the whole House, but we would still benefit from scrutiny of the measures that are going to Public Bill Committee. If the Minister could find a way, through the programme motion, for the Public Bill Committee to begin with an evidence session including organisations such as the Chartered Institute of Taxation and the Association of Accounting Technicians, it would be incredibly appropriate and even more necessary than usual this year.
As is noted in the Opposition amendment, there is no amendment of the law resolution, which means that any amendments to the Budget have to be tight in relation to the Budget resolutions. That means that we table an awful lot of amendments saying, “We’re calling for a review into this”, and then the Government stand up in the Public Bill Committee and say, “Why would we do a review? You’re only calling for a review. You’re not calling for anything tangible.” But we cannot call for anything tangible because the Government have tied our hands. I have made this point before and I will make it again: the Government must remember that they will not be in government forever. When they are in opposition and the same thing is being done to them, they will be standing up and complaining about it. They have caused this problem and opened these floodgates, and it is really bad for transparency and scrutiny if they keep behaving like this.
Clause 5 is about the personal allowance and the basic rate allowance, and the Government have chosen not to separate out the reserved and devolved matters in this clause. Now, I get that we have not had this devolved situation for particularly long, so this may be an oversight by the Government, but I implore them to ensure that in future years these matters are dealt with in separate clauses. It would be easy for them to do that. Indeed, it would also be easier for Mr Speaker, because he would be able to certify one part as English votes for English laws and not the other part, which is a reserved competency in relation to the personal allowance. This would make scrutiny and read-across better. It would just be a better process of making tax law if these two things were separated out. I ask that these points are taken into account the next time we have a Finance Bill, whether that is in March, October or November next year.
I sit on the European Statutory Instruments Committee, which is currently looking at the proposed negative instruments—it is riveting, honestly. As with lots of the legislation that is coming through just now, the Brexit clauses in the Bill allow the Minister further delegated powers. In fact, one of these clauses allows the Government to set spend for a new tax in relation to current pricing, without saying what that spend would be—I think that is around clause 80. The right hon. Member for Wokingham (John Redwood) talked about taking back control, but parts of this legislation allow the Government more control and more unfettered power. It would actually be more sensible for this House to take decisions over how much spending should be allocated in this regard, rather than giving Ministers more control.
As hon. Members would expect, I am going to mention fixed odds betting terminals. The Government say that they cannot lower the stakes from April next year because it would not give companies enough time to prepare adequately for the changes required, yet they expect companies to prepare adequately for Brexit by April next year, despite not actually having told companies what Brexit will involve. If the Government are serious about making changes to fixed odds betting terminals, they need to stop listening to the lobby on this and start taking into account the public health benefits of the changes.
Alan Mak
My hon. Friend makes a characteristically powerful point. I know that he is an entrepreneur who has started his own business, as I have.
Measures such as the cut to corporation tax will make our country even more competitive. When we started cutting corporation tax in 2010, we embarked on a journey that will allow this country to become one of the most competitive in the G20, with the lowest possible rate of corporation tax. I welcome that measure.
Alan Mak
I thank the hon. Lady for her intervention. I actually said that it was despite the pressures on our public finances, rather than our public services. We have to get the balance right between cutting taxes for our hard-working taxpayers and investing in our public services. She will know that the Government have announced an increase of £20 billion a year for our NHS—a step that I welcome—but we can only invest that money in our NHS and our public services if we are creating the wealth in the first place. It is the measures in the Budget, including those that cut corporation tax, that will allow us to generate that wealth. It is the measures we have implemented since 2010 that allow us to cut corporation tax.
Emma Dent Coad (Kensington) (Lab)
I am glad to see that those on the Government Benches have stopped making fun of our SNP colleagues’ accents. Of course, as a Londoner, I do not have an accent, do I?
I will address finance for housing in London, where many of the problems we experience are common across the nation, and I will begin by giving a little history. In 1966, leading modern movement architect Richard Seifert completed his iconic Centre Point commercial building on Tottenham Court Road. There were no takers for office space at the asking rate, and Harry Hyams, the developer, refused to lower it. This is an important historical point and it was very much debated at the time. It was empty until 1975—the developer got it wrong.
In an area near Soho where homeless people gather, it was inevitable that the building would be occupied for a period. The charity Centrepoint—ironically named after the building—was set up in a nearby church to tackle the problem of street homeless young people. Recently, a huge redevelopment of this building has been completed, with a change of use to residential.
Centre Point Residences is prime residential property next to a Crossrail station. The conversion is magnificent—if you like that kind of thing. However, it was reported two weeks ago that the developer had been unable to sell half the flats at the price he wanted, so he has taken them off the market completely, saying that he had already covered construction costs and leased the retail spaces at ground level—there was “no point” trying to sell. He got his timing wrong. Half the flats will remain empty long term, and there is no incentive to sell or rent them out.
This is the ultimate irony: homeless people line the streets in their hundreds—many, as we know, are servicemen—and they are ever more visible and desperate as winter approaches. Meanwhile, there are a recorded 20,000 empty homes in dark buildings across the capital, and 15,000 high-end properties on the market, and that does not count those taken off the market. Centre Point Residences is a monument to developer greed, and its empty homes distort the market further. It is obscene.
Meanwhile, the chief executive of Persimmon has been able to make a hasty retreat from his job to save the company embarrassment, with a £75 million bonus. Persimmon—which has a very mixed reputation, to put it politely—benefits hugely from Government grants via Help to Buy—another alarming example of the trickle-up economy.
What has the Chancellor done to address these issues in the Budget? He has given a few small inducements for new shared-ownership buyers, including no stamp duty; an extension of Help to Buy; further inducements to convert retail to residential; removal of the borrowing cap for council building programmes; and funding for housing associations. Most of, if not all, those schemes have problems: some inflate housing prices, and a majority still rely upon developers for delivery. The housing revenue account housing cap will apply only to council housing not already transferred to housing associations. That is about half.
In Kensington, in London and in other areas where property is expensive, the delivery of social rented housing still relies upon selling private high-value property, but this market has failed spectacularly. If we leave the provision of housing to the vagaries of the market, with no inducements to ensure people will ever live in the homes built, we will never house our homeless. If we leave disposal of new homes to the conscience of developers, we will never house our homeless.
Let us look briefly at the tax breaks that encourage people into private home ownership, for better or worse, all at the taxpayer’s expense. Council tax, based on 1991 values, is effectively a subsidy to landlords. Capital gains tax relief costs the country about £6 billion a year. The lack of property tax costs, apparently, £11 billion a year. The right-to-buy subsidy costs £2 billion a year. We also have shared-ownership subsidy, tax relief for buy to let, and Help to Buy, which pushes prices up, and indeed even subsidises second homes for those earning six-figure sums.
We need a thorough and honest review and a frank discussion about these subsidies—who in reality they are helping—and whether there are better ways to spend taxpayers’ money to provide stable homes for our families, not embarrassing pay-outs to chief executives.
We need a thorough review and a frank discussion of the role and practice of housing associations, now self-styled “developers with social purpose”, and their management of existing and new buildings. We need to get a grip on construction companies offering apprenticeships, for which many quite simply do not have the capacity, let alone the will. A billion pounds in apprenticeship levy lies unspent. We cannot build without builders. We need a nationwide needs assessment to inform our house building. Evidence is a better guide to housing need than developer greed.
On matters of concern in relation to work being carried out, or not, post Grenfell, the Chancellor’s Budget speech mentioned tax 34 times and housing 10 times, but there was not a single mention of Grenfell—not one. Now, residents are very anxious about the possible effects of toxic soil, after a report in The Guardian some weeks ago.
Emma Dent Coad
I do agree. There are 151 households, many of whom I see, and many of them are experiencing deteriorating mental and physical health, so it does not help that, throughout all this, the council has continued its—shall we say?—reputation-covering exercise.
I was present at a council meeting in mid-October, when the council denied knowing about the report on toxic soil, which had been made in February. Two weeks later, the council admitted it did know about the report. That is eight months of inaction, followed by its usual opaque practice, misrepresentation or, some would say, lies. Now there will be soil toxicity tests, but no funding for this, and it will not happen straight away. The council is going to “think about” screening tests on affected residents, but not straight away. Why is this failing and untrustworthy council still in control of Grenfell-affected people and services? My neighbours want an answer, as do I.
I also live there. I have a veg plot within the radius of the soil tested and have been enjoying it all year. Public Health England’s advice is to wash and peel home-grown vegetables, but how do you peel lettuce? We were told the “Grenfell cough” could be caused by anxiety. Five people I know are coughing blood. Now we are told the “Grenfell cough” is real, but we knew that.
The council stated publicly that no housing blocks in Kensington and Chelsea had combustible cladding, but the truth is that we have two with combustible render. The council is trying to minimise bad publicity, while deciding to strip the combustible envelope, as winter approaches. Residents are scared, upset and angry. Communication is appalling. Last week, the council said that there was no start date to this work. Today, it has said Wednesday.
The council applied to the Government for £50 million for the Grenfell recovery plan, including a lot of this work, but there has been not a penny from the Chancellor. If the Government do not trust the council, why would my constituents?
I have been working with fire safety specialists to try to get a grip on the spectrum of issues related to our current situation. The £400 million announced earlier this year for cladding replacement in council buildings was welcome, but it is not enough. Who will pay for the shortfall? Residents who have bought flats in new developments, some under Government schemes, face bills of tens of thousands of pounds. They do not have it. Who will pay for that?
Around London and nationwide, there are social tenants whose buildings have been unclad. Some are in for a second freezing winter. Who will pay their fuel bills? How many elderly and frail people will we lose this winter because they are too afraid to turn up the heating? Not a penny more has been allocated for this. Is that what the end of austerity looks like? I commend the work of Fuel Poverty Action and various local groups that are campaigning hard on the matter. Money must be found. This is a public health emergency. Cold kills.
That brings me to the work of updating or reinstating fire safety and building regulations. I spend a lot of time with specialists in these fields, too. I will be frank: I heard the policing, fire and Grenfell Minister speaking last week on this issue, and it seems that there is no action now. The Government are thinking about it, but we desperately need some movement on this, and there is no commitment even to upgrade building regulations long term. We are instead informed that the industry will deal with this; the industry will pay. I think the industry will pay itself. I am not convinced we are getting anywhere anytime soon on this, and that is completely unacceptable.
In this midst of this housing crisis, the Secretary of State for Housing, Communities and Local Government has decided to reinstate the much discredited architectural style wars of the 1980s. This is my period; I started as a journalist at that time and I went through that battle. Pitching neo-classical pastiche against the modern movement will not solve our housing crisis. That is a battle of style over substance, and it is based on snobbery and elitism. I have written a dissertation and a half on this very subject. This is a thinly disguised class war. I sincerely hope that the Secretary of State realises that this is based on fallacy, before we start to see poorly constructed Noddy’s Toy Towns such as Poundbury dumped on our green belt. I would be happy to give Members a full lecture on this one day—just let me know.
Architectural style wars are a distraction from the real issue of providing well-designed, well-constructed homes to suit the needs of desperate families, single people, our elderly and people with specific physical needs. There is nothing in the Budget to fix the unholy mess that we are in, post Grenfell. There is nothing in the Budget to address the dishonesty and greed that have been allowed to flourish in the housing and construction industry, and without such provision we cannot tackle the serious housing crisis that we are facing. Distraction techniques and platitudes will not save lives. Shame on you all.
Chris Philp
When we introduce any new system that involves 5 million recipients, there will inevitably be some level of operational teething problems. These teething problems are on nothing like the scale of those we saw in the early 2000s when Gordon Brown rolled out tax credits and there was unmitigated chaos for some years.
I have had direct experience of universal credit in my own constituency. Croydon South is the joint highest constituency in the country—with Great Yarmouth, I think—for universal credit roll-out, with 43% of claimants now on universal credit. I estimate that around 4,000 Croydon South constituents are now in receipt of universal credit, and in the past six months I have had 21 complaints or problems raised by constituents. That is obviously 21 too many, but viewed in the context of about 4,000 recipients, it would appear that the teething problems are limited in their extent.
Chris Philp
The growth in the use of food banks is of course a phenomenon that we have seen across western Europe. After the Budget, people on universal credit will be £630 a year better off than they were before—[Interruption.] The hon. Lady shakes her head, but that is a simple fact: the allowance has been increased. As I was saying a moment ago, the Resolution Foundation has found that the Government will be spending more money on universal credit following the Budget changes than would have been the case under the old benefits system. I would further point out that the track record of getting people off benefits and into work is better under universal credit than it was under the old benefits system. The way to combat poverty and create prosperity is to get people into work.
Colin Clark (Gordon) (Con)
It is an honour to follow the right hon. Member for Twickenham (Sir Vince Cable), who had government experience at the Department for Business, Energy and Industrial Strategy and therefore will support what is clearly a Finance Bill supporting business and the economy.
I rise to support the Bill and to recognise that this Government are focused on the economy. I declare an interest, as a business investor and business person. Hon. Members have applauded growth forecasts; employment has been revised up and wages are set to rise. I think we can all recognise that these are obviously good things. The OBR can give us all comfort that the estimates are independent and therefore scrutinised. Economic growth is vital to our public services and for household incomes, and it is what delivers living standards for all our citizens.
I wish to focus on income tax. The Chancellor has fulfilled our promise to raise the personal allowance to £12,500 and increase the higher rate threshold to £50,000. Nearly 1 million fewer people will pay the higher rate of income tax. We have a responsibility to ensure that the tax burden is fair and that the economy grows—surely that is what the purpose of government is. Conservative Members want to see the whole cake grow; we do not want to see just bigger and bigger slices taken of a smaller cake. We should not demonise the wealth creators, the job creators and those who drive the economy.
The £50,000 threshold benefits many public sector employees, such as headteachers, consultants, GPs, senior council officers, senior police officers and senior nurses. The threshold lifts 1 million people out, including middle management, engineers and pilots—the list goes on and on. As the right hon. Member for Twickenham said, these are not the fabled rich, who are condemned. How this measure is not progressive is beyond me.
Colin Clark
I thank the hon. Lady for the intervention. I think she will be well aware that many people in the public sector, including those in hospital management, and those who may go on from being nurses to being in hospital management, are paid substantially more than £50,000.
The OBR is concerned about this next issue. My hon. Friend the Member for Dumfries and Galloway (Mr Jack) asked the Financial Secretary about tax divergence, which is very much the crunch, as it has the potential to affect my constituency. The Financial Secretary mentioned that 1% of the population are paying 28% of tax—in Scotland, that constitutes 19,500 taxpayers. The OBR recently reported to the Treasury Committee that the number of higher taxpayers is lower in Scotland than it estimated, and this has actually cost Scotland between £550 million and £700 million in respect of the original estimate. The OBR said:
“It implies that a much lower share of UK-wide income tax is coming from Scottish taxpayers.”
That means the Scottish economy is more vulnerable to losing higher rate taxpayers, which is a serious consideration, because it affects the growth of the Scottish economy. As Scotland is part of the United Kingdom, it should concern us all. The Scottish economy is clearly vulnerable to the loss of these higher rate taxpayers, and it would look as though they are already beginning to move; they are already beginning to react to the divergence.
The OBR gave evidence on how people, for tax purposes, could change their behaviour. It talked about
“a relatively high income individual with a property in Scotland and one elsewhere in the UK, writing to HMRC to say, ‘I live more than half the year”
somewhere else. That would mean that their tax would be paid elsewhere in the UK. Here is the absolute proof that cutting tax rates increases the tax take. As was said by my right hon. Friend the Member for Wokingham (John Redwood), who is no longer in his place, if there is tax divergence, people will vote with their feet. They are already doing that, as we are seeing the tax take falling in Scotland. [Interruption.] Would the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) like to intervene? No, he would not. Labour should look closely at Scotland and it should be a lesson on why not to raise taxes.
Alex Chalk
It is critically important that we do not have a cap for those people who want to become nurses. One thing I found very depressing when I was first elected back in 2015 was that people wrote to me saying, “I want to become a nurse, but I can’t become a nurse, and yet the trust is off taking trips to other parts of the world to recruit nurses from overseas, while I cannot do it here in the UK.” That is something that we should not allow to continue. It is important that the money is spent in the communities that require it. In Cheltenham at the moment, trust managers want to shift all general surgery facilities from Cheltenham to Gloucester, but, as 58 clinicians wrote only today, that would be a mistake. It would be unsatisfactory for care in the whole of Gloucestershire, and I am calling on the trust to think again.
There was also £400 million for potholes, which is a priority for my constituents and something that I take very seriously as well. That is an extra £8 million or so for Gloucestershire. I also welcome the measures to safeguard businesses in our high streets. We all know that they are facing increased pressures, but to take a third off the business rate bill of small businesses in my constituency is a shot in the arm for our high streets and is something of which we can be proud. When I went round high streets in Cheltenham over the weekend, the news from the Chancellor was welcomed. Businesses could look towards a future with real optimism. The scope to roll out these measures is only provided by managing the economy fairly and sensibly. We do not take measures simply because we take some pleasure in eradicating the deficit for the sake of it; we do so because we want to create opportunity in our society. We want to say to our young people, “Be brave and be bold about the future because it is an exciting future.” A country that loses control of its finances loses control of the prospects of its young people. That is why I take pride in what the Chancellor has delivered and why we can say in confidence across this House that the United Kingdom’s best days lie ahead.
Karen Lee (Lincoln) (Lab)
Living standards in this country are a national disgrace. The “little extras” Budget did nothing to address society’s systemic issues and continued to prioritise the few over the many. Perhaps the Minister does not appreciate that the future is not brighter if you are standing in a queue at a food bank.
After eight long years of austerity, our public services are deprived of proper funding. Our fire service, NHS, police service and education services are all at breaking point, and “little extras” are simply not enough. While the taxation system continues as it is, with Conservative policies only tinkering around the edges, we will not see a substantial redress of economic inequality in this country. Put simply, the top 10% of the population own 44% of the nation’s wealth. Who does this country’s economy work for? Some in society have suffered eight years of austerity, and some have not. If the Government’s policies are benefiting the few more than they are benefiting the many, we have a systematic issue at the heart of society. Our economic system resembles what the economist Piketty would describe as “useless for growth”. It perpetuates further inequality over time and creates low social mobility, ingraining and preserving the status quo. The rich get richer and the poor get poorer, widening economic inequality.
Labour has a different outlook that sees real value in working people and offers them a fair deal by not raising taxes for 95% of workers but instead fairly raising taxes for the 5% who prosper the most in society. It acknowledges corporations’ role in society and expects them to pay their fair share, raising an estimated £19.4 billion for the public purse. It is not afraid of tackling the very wealthiest and commits to a comprehensive anti-tax avoidance plan—a plan that will work for those who are prepared to pay their fair share of tax and a society that will reap its benefits. This funding will be distributed to all the areas that all of society will benefit from: a properly funded NHS, free university education, a national education system, and a national transformation fund. Labour will rebuild Britain and make this Government’s destructive austerity programme an ideological choice of the past. This is how we will radically change society; this is how we will end austerity; and this is how the Labour party, when—not if—we are in government, will offer a fair deal for everybody in our society.
Finance (No. 2) Bill (First sitting)
Karen Lee Excerpts(6 years, 3 months ago)
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Peter Dowd
My hon. Friend makes an important point. The whole point of a social security system in tandem with a tax system is to ensure that those who can afford to pay do so, and those who cannot afford to pay do not. We are now in a topsy-turvy world, where things are being twisted around and the people who can least afford it pay and the people who can most afford it do not pay. That is the direction of travel, and it is affecting people day in, day out. I agree with my hon. Friend.
Ms Karen Lee (Lincoln) (Lab)
We hear a lot about the NHS; my hon. Friend has referred to it. I am a nurse, and I did a shift in my local hospital on Saturday. Last Wednesday, I went out for most of the day with the local ambulance service. The NHS is indeed in crisis, and until people pay a proper rate of tax and it is properly funded, that will remain the same. As a new Member, I am a little taken aback at the number of people who are simply not listening to this debate. They are on their iPads and phones. It would be good if people paid attention—
The Chair
Order. If Members wish to intervene on the Minister, they should do so in the proper manner.
Mel Stride
I will not, and the reason I will not is that we have a great deal of business to cover, as well as the fact that we might be straying slightly broader than the clause. I have given my reasons why I believe we should reject new clause 10—[Interruption.]
Budget Resolutions
Karen Lee Excerpts(6 years, 5 months ago)
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Sajid Javid
I know that the hon. Lady means well and that on this issue, at least, there is usually a welcome cross-party approach, but she is wrong to suggest that rough sleeping was ended at any time, under any Government. In fact, under the last Labour Government, statutory homelessness peaked in 2007. Since then, it is down by more than 50%. I hope that she agrees that we can all work together to do more to combat homelessness. For that reason, I hope that she will welcome the announcement of the new homelessness reduction taskforce, which will pilot a number of new ideas to help to cut rough sleeping by 2022 and to eliminate it altogether—working together—by 2027.
Homes are only part of the picture. Communities need roads, railways, schools, GP surgeries and much more besides. Investing in infrastructure can unlock a huge range of new sites and avoid putting too much pressure on existing communities that already feel squeezed. That is why we are committing a further £2.7 billion to more than double the size of the housing infrastructure fund, investing not just in houses but in the services that we all depend on.
Of course, our support for public services is not limited to new communities. We are putting an additional £6.3 billion of new funding into the NHS, upgrading facilities, improving care, improving A&E performance, reducing waiting times and treating more people this winter.
Ms Karen Lee (Lincoln) (Lab)
I am a nurse and I still do bank shifts at Lincoln County Hospital, and I am sorry but I really do not recognise what the Secretary of State is describing. Hospitals have got leaking roofs, with buckets to catch the water coming in, and nurses leave shifts at least an hour late, while our pay has been capped and we have lost 14% since 2010. I am sorry, but I do not recognise the NHS he is talking about.
Sajid Javid
I say gently to the hon. Lady that if this country had taken Labour’s approach to the economy, we would be heading for bankruptcy again, and there would be no new money for the NHS. I hope that she will join Members on both sides of the House in welcoming the additional £2.8 billion going to the NHS in resource spending next year and the additional £3.5 billion that has been made available for capital spending over the next five years.[Official Report, 27 November 2017, Vol. 632, c. 1MC.]
Ms Karen Lee (Lincoln) (Lab)
This Budget offered the majority of my constituents very little hope, and hope is what is missing in our society. I am not talking it down; the grim truth is that our economy has flatlined. The cut in stamp duty is of no use to my constituents on low wages who cannot afford a mortgage, and the OBR says that without an increase in supply, the stamp duty cut will drive prices up. The public sector pay cap is alive and well for our firefighters, police, teachers and local government workers, and there is a deafening silence about the 14% drop in wages that nurses have suffered since 2010. All healthcare workers—porters, healthcare support workers and housekeepers—do a vital job, and they have all suffered under the pay cap.
What about social care? There was another deafening silence about that yesterday. Although I welcome the news that people will no longer have to wait a whole week before being allowed to claim universal credit—I think that they were meant to starve for that week—the extra money that the Government boast about putting into universal credit will not replace what has already been taken out. In Lincoln, the use of food banks has increased since universal credit was partly rolled out, and the measures in this Budget do little to reassure me that my constituents will not suffer further from the full roll-out next March.
If I look across the House, I see that some Conservative Members cannot even look at us because they know that what we are saying is true. Indeed, 25% of children in Lincoln live in poverty, and this Budget has done nothing for them. This Government boast about having a low-tax economy, and the Paradise papers a couple of weeks ago put that statement in a very clear light. If we had a fair taxation system, we would not be talking about properly resourcing public services.
Ms Lee
No, I will not; I am going to make some progress.
This Budget has done nothing to challenge or address the unfairness in our society, and people will feel poorer for longer. It is most definitely not a Budget for the many, and those who benefit are, without doubt, the very few. As a newcomer to the Opposition, I think that Government Members ought to hang their heads in shame, and they ought to wake up and realise what is really going on in this country. I can promise them that things are very different in Lincoln from how they are in Taunton.